Month: April 2012

Prepaid credit cards are witnessing a steady rise in popularity with many opting for them, as compared to conventional credit cards. With mounting rates of interest, different types of charges and penalties, cardholders are finding prepaid credit card as safer bets. Though the US economy has improved, there is still an air of speculation about the US economy.

Credit card companies are holding back on credit card applications as a way to immunize themselves against potential losses. At the same time, there has been an increase in applications for bankruptcies with more than 1.25 million cases seen during recession. Among alternatives that consumers are looking for, debit cards, secured credit cards and prepaid credit cards are getting a lot of appreciation.

Prepaid credit cards do not require any collateral in the form of a bank deposit; they do not even have credit limits. Most people who opt for such types of cards are those with poor credit, maxed out credit limits and often find it tough to find their applications approved by banks.

As we know, secured cards have credit limits equivalent to the amount of money put in the bank deposit. But in prepaid credit cards, there are no such things as credit lines; you have to load funds into the card before you can start using them. This gives consumers better control of the transactions they make using the card.
Bill Forrester, a credit card user who has turned to prepaid credit card says, “This carries the convenience of plastic without the trappings of high interest rates and stupid surcharges. They replace cash in a much better manner.” Secondly, prepaid credit cards ten to be accepted anywhere major credit cards are accepted. This really gives you flexibility of cash and ease of carrying plastic.

Suppose you want to make an online purchase and you are reluctant to give our credit card information. In this case, the prepaid credit card can be your best help; you can make the purchase and still do not need to give any information to your online merchants.

The other significant benefit of using a prepaid credit card is that you pay only for things that you can afford at particular point of time. This means, you do not have to worry about balance transfers, payment for other benefits apart from the interest rates. You can compare these cards as your regular bank accounts, and directly deposit paychecks into the prepaid credit card instead of a bank account. This makes way for easy management of money even for the younger lot who are looking for their first credit card. They do not have to be worried about being burdened by unnecessary charges on their card.

There are however a few charges associated with prepaid credit cards which include application fees, activation charges, maintenance fees and even additional charges for using their ATM services. The flip side is you cannot delay your payment, the way you can do with a regular credit card. Also, one should know that you may be charged a certain amount as fee if you do not keep a quarterly balance lie the way it happens with regular bank accounts.

Anyone one that has ever struggled with debt will understand just how much of a burden it can be. Not only does it affect you financially, it impacts upon every area of your life, causing stress and putting a strain on home life. Owing large amounts of money to creditors has you longing for financially independence, without the need to rely on loans and credit cards. The only true way of achieving such independence is through debt elimination and many financial advisors suggest that eliminating debt completely is the only way to a brighter future.

Confronting your debts is the first step in debt elimination, once you have acknowledged that you are in debt, you can begin to tackle it. This first stage is often the hardest, many people that are in debt are ashamed to admit it, and thus find themselves with mounting bills as they struggle to make repayments. However, taking a stand against debt is the only way to finally obtain financial independence.

Tackling debt is going to be almost impossible without the help of a financial advisor – someone that can look through your finances and put a debt elimination plan into place. A financial advisor will be able to interact with creditors on your behalf – something which is often a struggle for many people. When dealing with creditors alone, you can often find them to be pushy and intimidating, receiving the help of a financial advisor will ensure threatening letters and phone calls are stopped. They will also put into place an arrangement with each creditor, starting with the most important debts (mortgage, fuel bills, secured loans etc.), whereby you pay them a monthly sum that is affordable to you based on your income and essential outgoings.

While a financial advisor will be key in debt elimination, there are steps that you will need to take to stand a chance of achieving financial independence. The first thing to do will be to start using cash as opposed to credit cards, many financial advisors will recommend that credit cards are cut up and thrown away. Any offer of credit received through the post should be instantly thrown in the trash and you will need to learn say NO when offered credit over the phone or when at the mall.

A trustworthy and experienced financial advisor will be essential in creating a debt elimination plan that works around your circumstances. Using the Better Business Bureau will ensure that you find someone with a long and proven track record in delivering financial independence for their clients.

Getting finances under control will help to get your life back and start afresh without the constant worry of creditors – a debt elimination plan will ensure this and is a great first step towards achieving your financial goals.